Intertape Polymer Group Reports 2022 First Quarter Results

Intertape Polymer Group Inc. (TSX:ITP) (“IPG” or the “Company”) today released results for its first quarter ended March 31, 2022. All amounts in this press release are denominated in US dollars (“USD”) unless otherwise indicated and all percentages are calculated on unrounded numbers. For more information, refer to the Company’s management’s discussion and analysis (“MD&A”) and unaudited interim condensed consolidated financial statements and notes thereto as of and for the three months ended March 31, 2022.

“The demand environment for our packaging and protective solutions remained strong through Q1 2022 and continues into Q2 as demonstrated by our revenue growth and ability to protect our dollar contribution spread with price increases,” said Greg Yull, President and CEO of IPG. “The rapid rise in the cost of raw materials during the past 18 months resulted in price increases of approximately $70 million in Q1 2022 compared to the same period last year for total revenue of more than $406 million. The global supply chain challenges and isolated labor constraints at specific manufacturing facilities impacted our volume/mix growth despite the strong demand. The team has done a great job in a difficult environment ensuring we meet the needs of key customers, secure sufficient supply of raw materials and operate the assets safely in a healthy environment. The improvements we have made during the past five years through efficiencies, capital investments and acquisitions provide a foundation for growth. We are in a great position with the team, the experience, and the strategy to meet demand with our world class, low cost manufacturing assets.”

First Quarter 2022 Highlights (as compared to first quarter 2021):
• Revenue increased 17.6% to $406.4 million primarily due to the impact of higher selling prices in tape, film, woven, and protective packaging products driven by increases in the cost of many raw materials and freight.
• Gross margin decreased to 21.0% from 23.9% primarily due to the unfavourable mathematical impact of Dollar Spread Maintenance(1) and increased plant operating costs.
• Net earnings attributable to the Company shareholders (“IPG Net Earnings”) decreased $75.7 million to a net loss (“IPG Net Loss”) of $56.7 million ($0.96 basic and diluted loss per share) primarily due to charges related to the Arrangement(2) for contingent consulting fees payable upon completion as well as a significant increase in the fair value of share-based compensation awards in selling, general and administrative expenses (“SG&A”).
• Adjusted net earnings(3) increased $0.4 million to $29.3 million ($0.49 basic and $0.48 diluted adjusted earnings per share)(3) primarily due to an increase in gross profit, an increase in foreign exchange gains and a decrease in income tax expense. These favourable impacts were partially offset by an increase in SG&A mainly due to increases in (i) employee- and technology-related costs, (ii) professional consulting services and (iii) additional SG&A from the Nuevopak(4) and Syfan USA(5) acquisitions.
• Adjusted EBITDA(3) decreased $1.7 million to $58.5 million from $60.3 million primarily due to an increase in SG&A, partially offset by an increase in gross profit.
• Cash flows used for operating activities increased $26.9 million to $55.8 million primarily due to a greater decrease in accounts payable, partially offset by a decrease in accounts receivable and non-recurrence of share-based compensation settlements in the first quarter of 2021 related to cash-settled awards.
• Free cash flows(3) decreased by $38.1 million to negative $76.4 million primarily due to an increase in cash flows used for operating activities and an increase in capital expenditures.
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